A review on the success factors of crowdfunding-based to finance small-scale infrastructure projects

Abstract

Public-Private Partnership (PPP) schemes in delivering economic and social infrastructure are growing in developing countries worldwide. Various developing countries, including Indonesia, has also been preparing and developing numerous projects, ranging from larger-scale economic infrastructures that include toll roads to multifunction satellites and smaller-scale social infrastructures that include water supply, solid-waste management, and regional hospital projects. With the increasing numbers of smaller infrastructure projects proposed by the local government, attracting financers to invest in these projects is still a challenge the government faces. Financial institutions are still averse to making the appraisal and due diligence to such projects, owing to the nature of little historical evidence of private finance involvement in small-scale infrastructure finance. In some western countries, citizens have taken the initiative to forward and finance their local infrastructure development due to realizing the social, economic, and environmental benefits of civic projects for the local community. Theoretical research has shown the opportunity of utilizing crowdfunding for local urban infrastructure; however, the factors contributing to benefit from this finance method are yet to be identified. This paper seeks to answer questions on what success factors contribute to the opportunity to adapt the crowdfunding scheme to finance a smaller-scale urban infrastructure project by conducting qualitative literature review.